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BCS vs. EBKDY: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Barclays (BCS - Free Report) and Erste Group Bank AG (EBKDY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Barclays and Erste Group Bank AG are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BCS currently has a forward P/E ratio of 7.38, while EBKDY has a forward P/E of 11.35. We also note that BCS has a PEG ratio of 3.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EBKDY currently has a PEG ratio of 6.31.

Another notable valuation metric for BCS is its P/B ratio of 0.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EBKDY has a P/B of 0.54.

These are just a few of the metrics contributing to BCS's Value grade of B and EBKDY's Value grade of C.

Both BCS and EBKDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCS is the superior value option right now.


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Barclays PLC (BCS) - free report >>

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